Healthy prospects: a commercial real estate program offers investment opportunities. (Real Estate Strategies).Juanita Simmons always wanted her own health spa. In fact, 15 years ago, she was bold enough to carpet her garage, install insulation, and begin operating a private exercise studio while she was employed at Salomon Brothers
Salomon Brothers was a Wall Street investment bank. before it merged with Smith Barney. "I used my earnings from my salary to open my exercise studio," says Simmons, a 51-year-old single mother. She also took out an $8,000 personal loan to expand her enterprise before realizing that she needed a larger commercial space. Simmons, who has been in the fitness business for 25 years, was seeking a new location for her business when she saw a flyer enclosed with her electric bill advertising buildings for sale in the StoreWorks program (212-519-2528; www.nhsnyc.org). StoreWorks is a collaborative partnership between the Neighborhood Housing Services Community Development Corp. (NHS NHS abbr. National Health Service NHS (in Britain) National Health Service ), the City of New York's Department of Housing Preservation and Development (HPD HPD Honolulu Police Department (Honolulu County, Island of Oahu) HPD Housing Preservation and Development HPD Housing Preservation and Development (New York City Department) ), the Department of Housing and Urban Development (HUD Hud (h  d), a pre-Qur'anic prophet of Islam. Hud unsuccessfully exhorted his South Arabian people, the Ad, to worship the One God. ), and participating
private lenders, to rehabilitate vacant, mixed-use, city-owned
buildings, before restoring them to private ownership. The program only
operates in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. . "It was a blessing from God," says Simmons, of her purchase. "I didn't think it was possible to purchase a building on a working salary." Simmons bought her building for approximately $240,000 in 2000. Located in St. Albans, Queens St. Albans is a residential community in the New York City borough of Queens around the intersection of Linden Boulevard and Farmers Boulevard, southeast of Jamaica and northeast of Springfield Gardens and Laurelton. The neighborhood is part of Queens Community Board 12. , New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , it has two residential apartments above a commercial space, which now houses Body Connections Health Club--her new health club. William Kelsey, director of NHS, says there are no income limits for buyers to qualify for StoreWorks properties. Purchasers may be the residential or commercial occupants in the buildings, which are distributed through a lottery process that is supervised by HPD. In New York, buildings have sold for between $150,000 and $385,000, with additional development and rehabilitation costs ranging from $165,000 to $570,000. The buildings are also made more affordable through the use of HUD's 203(k) mortgage loan guarantee program. To make her purchase, Simmons tapped into her savings, retirement account, and cashed in stocks to come up with $70,000 for the down payment, attorney and architect fees, and closing costs Closing Costs The numerous expenses (over and above the price of the property) that buyers and sellers normally incur to complete a real estate transaction. Costs incurred include loan origination fee, discount points, appraisal fee, title search, title insurance, survey, taxes, . She needed an additional $20,000 to customize the building for her specific needs. While she has made a substantial investment in the property, there are several financial advantages. The two residential apartments in the building are earning her approximately $2,500 a month in rental income, which helps pay for the building. The renovation of the building has increased the value of the property, improving her asset base. Because she owns the building, the overhead costs overhead costs see fixed costs. for renting commercial space is eliminated because her mortgage payments add to the equity in her property. And because she has a customized business space, her business is expanding again, and her attorney has advised her that she is on track for growth. |
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